Plus: U.S. Trade Gap Expands, Jobless Claims Hit Four-Year Low and Future Fuel Consumption Rates Call for Sustainability Improvements.
U.S. Trade Deficit Widens
The United States trade deficit expanded to $44.2 billion in August, a 4.1 percent increase over the upwardly revised $42.5 billion total in July, largely due to slower growth in global markets driving down foreign demand for U.S. goods to the lowest level in six months, according to the U.S. Department of Commerce. August exports fell 1 percent to $181.3 billion, while imports inched down 0.1 percent to $225.5 billion.
The goods deficit for the month rose to $59.3 billion, a $1.5 billion increase from July, while the services surplus fell by $0.3 billion to $15.1 billion. Goods exports declined by $2.1 billion, led by dropping demand for industrial supplies and materials, foods and beverages, consumer goods and automotive vehicles, parts and engines. Goods imports fell by $0.7 billion, with the steepest losses in consumer goods, automotive vehicles and parts and capital goods. Meanwhile, services exports rose by $0.2 billion to $52.8 billion and services imports increased by $0.5 billion to $37.7 billion.
“A stagnant Europe and slower growth in China and other emerging markets may curtail demand for American products, which had been a source of strength for U.S. manufacturers earlier this year,” Bloomberg News reports. “At the same time, the pickup in energy costs may push up the nation’s import bill, keeping the trade gap elevated.”
Total exports in August were at their lowest level since February. A recession afflicting numerous countries in the European Union, which accounts for roughly one-fifth of U.S. exports, has greatly weakened goods demand in the region. The trade gap with China dipped 2.3 percent to $28.7 billion in August, but the deficit is on track to surpass last year’s record, which was the highest ever recorded with a single country.
“The widening trade gap with China has heightened trade tensions between the two countries. And it has become a flash point in the presidential race,” the Associated Press notes. “GOP challenger Mitt Romney has promised a tougher approach than President Barack Obama with trade practices that he says are giving China unfair advantages.”
Obama Dedicates $20 Million to Manufacturing Partnerships
The Obama administration announced last week that it has selected 10 public-private manufacturing partnerships to receive a total of $20 million as part of an initiative to encourage manufacturing investment.
These 10 partnerships, which consist of small and large businesses, colleges, nonprofits and other organizations described as “manufacturing clusters,” were selected as part of the Advanced Manufacturing Jobs and Innovation Accelerator Challenge, a partnership between the U.S. Department of Commerce’s Economic Development Administration and the National Institute of Standards and Technology, the U.S. Department of Energy, the U.S. Department of Labor’s Employment and Training Administration, the U.S. Small Business Administration and the National Science Foundation.
The grants will enable the 10 selected clusters to increase training operations, encourage regional development and foster cooperation to improve exports and technology research and development. Estimates from the federal government claim the grants will help train 1,000 workers and bolster hiring at nearly 650 companies.
“By partnering across the federal government, these grants will help us leverage resources and ensure that training programs for advanced manufacturing careers provide the skills, certifications and credentials that employers want to see from day one,” Secretary of Labor Hilda L. Solis said in a statement.
The grant arrives on the heels of another initiative from the White House to provide funding for the National Additive Manufacturing Innovation Institute in Youngstown, Ohio. To see the full list of grant recipients, check HERE.
Jobless Claims Fall to Four-Year Low
New initial jobless claims fell sharply in the latest week reported, consistent with signs that conditions in the labor market are gradually improving, according to the U.S. Department of Labor. Seasonally adjusted unemployment insurance claims for the week ending October 6 dropped to 339,000, a decrease of 30,000 from the previous week’s total and the lowest level since February 2008.
Moreover, the four-week moving average, which provides a more accurate long-term picture of the employment situation, fell by 11,500 to 364,000 for the week.
The decline in jobless claims was unexpected, as economists polled by MarketWatch had forecast initial claims for the week to rise by 1,000 to a seasonally adjusted 368,000. Last week’s total was revised up by 2,000 to 369,000.
Although the latest jobless claims figures were in line with the drop in the national unemployment rate, which fell last month to a nearly four-year low of 7.8 percent, some experts consider the claims decline to be the result of a statistical anomaly.
“One state posted a large decline in claims, which is not typical during the last week in September. The drop probably occurred because that state didn’t fully process end-of-quarter claims…If that’s the case, it’s possible initial claims could shoot back up next week, once those claims are processed,” CNNMoney explains. “Usually, most states report a rise in initial claims at the end of the quarter. The Labor Department seasonally adjusts its figures to account for those trends, but this year the rise was smaller than expected because of that state.”
Future of Fuels Initiative Examines Sustainability Impacts
The new Future of Fuels Initiative by consulting company BSR examines the sustainability impacts of transportation fuels and pinpoints improvement and collaboration opportunities within the fuel sector and associated supply chain. The organization has issued a report based on corporate, non-governmental organization and public sector feedback, as well as company research.
The findings analyze the impact of various transportation fuels “in the context of their market outlook, or current and projected viability as large-scale solutions.” While there is significant room to improve our understanding of fuel consumption, the industry and associated sectors can identify how to positively influence upstream and downstream energy production.
One area with high innovation potential is the supply chain sustainability efforts made by manufacturing industries. The fuels market and value chain would benefit from introducing a model focused on transparency and capacity-building systems, the report emphasizes.
With world energy consumption set to rise by nearly 40 percent by 2030, the report highlights several ways to support sustainability: As advanced fuel technologies take off, they will require major investments in order to be commercially significant, and companies can help by promoting such technologies as part of a broader sustainability portfolio.
Furthermore, BSR emphasizes that companies striving to advance fuel sustainability need to focus on “increasing the benefits and reducing the negative impacts of all sources,” rather than attempting a “silver bullet” solution.